THE Government and the Opposition appear to be moving closer to an understanding of the situation with the bauxite levy, after Tuesday’s sitting of the House of Representatives.

During the sitting, Minister of Finance and the Public Service Dr Nigel Clarke, not only answered questions asked of him by Opposition spokesman on Mining and Energy Phillip Paulwell, but also gave his own take on the issues surrounding the Government’s reduced intake from the once lucrative revenue source and virtually made a pact with Opposition Leader Dr Peter Phillips to maintain a united approach to dealing with the international producers.

It was an exemplary approach by the MPs to a possibly divisive issue, which could have breached the decades long cooperation between both major political parties and open up the industry to corporate control, but in effect reminded us of the power of our Parliament when members put country above party.

Clarke, a newcomer to the parliament and politics, showed the kind of flexibility that is expected among the members when the threat is to Jamaica’s economy, as he was pressured by Paulwell to admit failure. He showed confidence in the team that negotiated the recent deal and, eventually, accepted a reaffirming hand from Dr Phillips that what was important was what is best for Jamaica.

Dr Clarke insisted that, in terms of the recent deal with New Day, the Government had an experienced team which negotiated the best deal possible with New Day, the new owners of Noranda, in the context of the global price fluctuations and the fact that Noranda had already filed for bankruptcy.

Paulwell insisted that the matter of the levy is crucial, because it means that foregoing it would deny the country billions of dollars, and commented that the Government was not being transparent on the matter.

This raised opposition temperatures, with Leader of the House, Karl Samuda, suggesting that the minister had already explained enough about the issue, and that the House had other things to do with its busy schedule for the day.

“We cannot continue this way…we don’t have the time to sit down arguing and trying to satisfy a member who has his own facts mixed up. He is trying to make something out of nothing and there is a limit to our endurance,” Samuda argued.

At that point Dr Phillips chipped in, probably realising that Dr Clarke seemed to be honestly admitting that the deal worked out with the bauxite companies was not the most appropriate, but was probably the best on the table.

The Opposition Leader noted that during the Bruce Golding Administration (2007 to 2011), when there was a similar global recession with negative effect on the bauxite/alumina industry, the House had agreed with the then Government’s proposals. With the support of the then Opposition, they agreed that the levy should be waived, and there was also agreement to extend it through the period of that Administration and, in fact, extend it into the period of the Portia Simpson Miller Administration which followed.

“So it should be in a sense disingenuous for us to make a division between political administrations, as far as the waiver of levy was concerned,” Phillips said.

Dr Phillips also noted that the levy was one of things in the House on which Government and Opposition had often found common cause.

However, he felt that Clarke should admit that the logic behind any formula for an agreement on a waiver would be to secure some predictability as to Jamaica’s earnings from the depleting resource, and to ensure transparency in the calculation by reference to the world market price.

“Would the minister agree that the point is highlighted by the fact that using the calculation of the levy, the shadow minister was able to identify, with that formula, what our earnings under the levy would be?” Phillips asked.

He said that the minister and the Government were unable to tell the House what the earnings would be with the new formula which they had agreed to.

“And the part that is hampered is because your only ability to know where the company is assigning its profits and its losses depends on the quality of its auditors which is not the Government of Jamaica?” Phillips added.

Dr Clarke said that he appreciated the Opposition Leader’s intervention, because it was the spirit in which the topic ought to be discussed, as a sober one, because it is a national issue.

“This is not a JLP or PNP asset. So when the questions are posed to try and make it a political thing…by the way in which you phrase it, I agree,” he added.

Clarke said that there was good reason for a legitimate debate about whether having a fixed amount or fluctuating approach as an agreement.

“We agree that bauxite is a resource with a finite life, and is a resource that belongs to the people of Jamaica. So while bauxite has life, the people of Jamaica need to earn from it, and I believe that both sides are united in that view,” Clarke.

He noted that there were times, like in the mid-70s and early 80s, when the earning from the levy could be as high as US$120 million or US$130 million per annum. But it fell down to between US$60 million and US$40 million per annum and went even lower, with the global crisis, since which the country has been struggling to find the best way to get some earnings from the sector.

He noted that the team which had discussed the deal with the bauxite alumina companies was multifaceted and consisted of persons from two or three ministries, and technocrats who had been involved in that area for a long time at the ministry of mining.

He said that the country had found itself in a position where price was as low as US$1,600 per tonne, a five-year low, as the recovery had not yet occurred and what was accepted represented an attractive approach, all things considered, including the certainty of the US$12 million payment from an arbitration award owed by a company which was already bankrupt.

“So the context is important, but I do agree that there are advantages and disadvantages to the various approaches and, in the moment those who transacted on behalf of Jamaica acted in the best interest of the country. I believe they did their best to get the best for Jamaica. I believe that is what happened with the letter of intent that was signed in 2016,” Clarke added.

Dr Phillips responded that, having said all that he had said, was the Opposition to assume that as the minister responsible for the revenue, he would be prepared to keep the issue under review, as to the best formula to be used to ensure that Jamaica gets a maximum return for the depleting asset.

“As I said before this is a national asset. So it is not an asset that I believe we should be divided on, at all. I believe that it is an asset that we should approach with a unified approach. So that the producers cannot pick off Government from Opposition at any point in time, in this time or any time to come, and as such, yes, I believe this must be something under continued review with New Day that says that the approach can be reviewed in three years,” Dr Clarke responded.